German President Christian Wulff has announced his resignation, after prosecutors called for his immunity to be lifted, BBC reported.
An ally of Chancellor Angela Merkel, Mr Wulff is embroiled in a scandal over a home loan that he accepted when he was premier of Lower Saxony.
Mrs Merkel cancelled a visit to Italy on Friday to deal with the crisis, and she will give a statement shortly.
German media say the crisis is unprecedented in post-war Germany.
The BBC's Berlin correspondent Stephen Evans says the affair will be no more than a headache for Chancellor Merkel, whose approval rating is high among the German people.
However, it comes at a time when she does not need any new headaches, as Germany wrestles with the eurozone debt crisis, our correspondent adds.
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